The Board of Governors of Loyalist College of Applied Arts and Technology v. Ontario Public Service Employees Union

The Board of Governors of Loyalist College of Applied Arts and Technology v. Ontario Public Service Employees Union [Indexed as: Loyalist College of Applied Arts and Technology (Board of Governors) v. Ontario Public Service Employees Union]

63 O.R. (3d) 641

[2003] O.J. No. 743

Docket No. C37988

Court of Appeal for Ontario

O'Connor A.C.J.O., Laskin and Borins JJ.A.

March 6, 2003

*Application for leave to appeal to the Supreme Court of Canada dismissed with costs November 20, 2003 (Iacobucci, Binnie and Arbour JJ.).

Employment -- Labour relations -- Collective agreement -- Collective agreement and not individual negotiation should govern employment relationship in unionized workplace -- Unionized employer and employee precluded from engaging in individual bargaining with respect to condition whose non-fulfilment could lead to dismissal.

Employment -- Labour relations -- Grievance arbitration -- Judicial review -- Standard of review -- Unionized employer offering employee job on condition that she enrol in graduate program in her probationary year -- Employee dismissed when she had not enrolled in graduate program ten months into her probationary year -- Arbitration Board upholding employee's grievance of her dismissal -- Board holding that condition of employee's hiring invalid because law prohibited unionized employer and employee from negotiating condition of employment -- Alternatively, Board concluding that condition was invalid because it conflicted with collective agreement -- Appropriate standard of review of both decisions that of patent unreasonableness.

Employment -- Labour relations -- Grievance arbitration -- Probationary employees -- Unionized employer offering employee job on condition that she enrol in graduate program in her probationary year -- Employee dismissed when she had not enrolled in graduate program ten months into her probationary year -- Arbitration Board upholding employee's grievance of her dismissal -- Board holding that condition of employee's hiring invalid because law prohibited unionized employer and employee from negotiating condition of employment -- Alternatively, Board concluding that condition invalid because it conflicted with collective agreement -- Board having jurisdiction to entertain grievance despite clause in collective agreement precluding probationary employee from grieving dismissal -- Employer's decision to dismiss probationary employee may be reviewed if decision made in bad faith or based on illegal or invalid consideration -- Employee's dismissal due to non-compliance with unlawful condition was based on invalid consideration.

The applicant employer and the respondent union were parties to a collective agreement covering academic employees of the applicant. B was offered a job as a full-time teacher by the applicant on condition that she enrol in a graduate program in her field of study during her probationary year. B accepted the offer. Ten months into her probationary period, she had still not enrolled in a graduate program. The applicant fired her. She grieved the firing. The majority of the Arbitration Board upheld the grievance, holding that the condition of her hiring was invalid because the law prohibits a unionized employer and an employee from negotiating a condition of employment. Alternatively, the majority concluded that the condition was invalid because it conflicted with the collective agreement. The [page642] Divisional Court dismissed the applicant's application for judicial review. The applicant appealed.

Held, the appeal should be dismissed.

The standard of review of the Arbitration Board's alternative finding, that the condition was invalid because it contradicted the collective agreement, is patent unreasonableness. Under s. 84(1) of the Colleges Collective Bargaining Act, R.S.O. 1990, c. C.15, the Board's decision is protected by a full privative clause. For matters within a tribunal's jurisdiction, this reflects the legislature's intent to limit review to patently unreasonable errors unless other factors strongly point to a less deferential standard. The most important of these other factors is the relative expertise of the Board on the issue before it. In this case, this factor supports a highly deferential standard. Whether the condition of B's hiring contradicts the collective agreement is the kind of issue labour arbitrators often have to decide and on which they have a great deal of expertise. The appropriate standard of review of the Board's first and main finding, that the condition was invalid because the applicant could not legally bargain this condition with an individual employee, is also that of patent unreasonableness. The Board's decision is protected by a full privative clause. Although the Board has to consider the Supreme Court of Canada's jurisprudence on pre-employment conditions, it also has to consider the Act and the recognition clauses in the collective agreement, both matters on which its expertise was engaged. The Board had to consider a narrow issue of law limited to the field of labour relations and this issue engaged its expertise.

Although the standard of review of the Board's decision was patent unreasonableness, the Board's decision would not interfere with it even if the appropriate standard were correctness. Section 52 of the Act and Article 1.01 of the collective agreement both explicitly provide that the union is "the exclusive bargaining agent" for all employees covered by the collective agreement. The collective agreement, not individual recognition, governs the employment relationship in a unionized workplace. Permitting an employer to negotiate directly with an employee a term or condition of continued employment conflicts with that principle. Individual bargaining of a condition whose non-fulfilment could lead to dismissal is precluded. Individual bargaining regarding terms and conditions of employment may be permitted where it is sanctioned by the collective agreement, where it is ancillary to routine administration of the collective agreement, where it falls outside the scope of the agreement, or in some cases where there is a voluntary waiver of a collective agreement benefit that does not undermine the collective agreement. In this case, the condition of B's hiring was not sanctioned by the collective agreement and was not ancillary to the routine administration of the agreement; nor was it a term outside the scope of the agreement that might be individually bargained for. Instead, it was a term that went to the core of B's continued employment. The Board correctly held that the condition was invalid.

The Board's conclusion that the condition of B's employment was invalid because it conflicted with the collective agreement was reasonable. Article 27.02C of the collective agreement provided: "During the probationary period an employee will be informed in writing of the employee's progress at intervals of four months continuous employment or four months of accumulated non-continuous employment and a copy given to the employee. Also, it is understood that an employee may be released during the first five months of continuous or non-continuous accumulated employment following the commencement date of the employee's employment upon at least 30 calendar days' written notice and during the remainder of the employee's probationary period upon at least 90 days' [page643] written notice. If requested by the employee, the reason for such release will be given in writing". The condition of B's hiring, in the Board's view, contradicted the scheme and purpose of Article 27.02C because it added a ground for her release not found in the collective agreement. The Board's finding of a conflict between the condition and the collective agreement made good sense. The traditional purpose of a probationary period is to assess the employee's on-the-job performance. Although not expressly contradicting Article 27.02C, the hiring condition implicitly conflicted with it and with its purposes.

The Board had jurisdiction to entertain the grievance despite the fact that Article 32.06 of the collective agreement on its face precluded a probationary employee from grieving his or her dismissal. Generally speaking, arbitrators cannot review the merits of an employer's decision to dismiss a probationary employee. However, arbitrators may be entitled to do so if the decision was made in bad faith or was based on an illegal or invalid consideration. The Board had jurisdiction to hear B's grievance because her dismissal was based on an invalid consideration, namely, the condition of her continuing employment. The applicant could have properly dismissed B for reasons related to her suitability for the job. What the applicant could not do was rely on its own prohibited conduct to dismiss her. The applicant's reliance on a condition that was either unlawful or in conflict with the collective agreement entitled B to grieve her dismissal.

APPEAL from a judgment of the Divisional Court dismissing an application for a judicial review of a decision of a Board of Arbitration upholding a grievance.

Canadian Assn. of Industrial, Mechanical & Allied Workers, Local 14 v. Paccar of Canada Ltd., 1989 49 (SCC), [1989] 2 S.C.R. 983, 40 B.C.L.R. (2d) 1, 62 D.L.R. (4th) 437, 102 N.R. 1, [1989] 6 W.W.R. 673, 89 C.L.L.C. 14,050; McGavin Toastmaster Ltd. v. Ainscough (1975), 1975 9 (SCC), [1976] 1 S.C.R. 718, 54 D.L.R. (3d) 1, [1975] 5 W.W.R. 444, 4 N.R. 618, 75 C.L.L.C. Â14,277 (sub nom. Ainscough v. McGavin Toastmaster Ltd.); R. v. Canadian-Pacific Railway, 1962 11 (SCC), [1962] S.C.R. 609, 34 D.L.R. (2d) 654, 62 C.L.L.C. 15,407; Syndicat catholique des employées de magasins v. Paquet Ltée, 1959 51 (SCC), [1959] S.C.R. 206, 18 D.L.R. (2d) 346, 59 C.L.L.C. 15,409, consd Johnston v. Dresser Industries Canada Ltd. (1990), 1990 6808 (ON CA), 75 O.R. (2d) 609, 36 O.A.C. 371, 28 C.C.E.L. 221, 90 C.L.L.C. 14,038 (C.A.) (sub nom. Roberts v. Dresser Industries, Winnard v. Dresser Industries); Toronto (City) v. Canadian Union of Public Employees, Local 79 (2001), 2001 24114 (ON CA), 55 O.R. (3d) 541, 205 D.L.R. (4th) 280, 2002 C.L.L.C. 220-014, 45 C.R. (5th) 354 (C.A.), affg (2000), 2000 30193 (ON SCDC), 187 D.L.R. (4th) 323, 2000 C.L.L.C. 220-038 (Ont. S.C.J.) (sub nom. Toronto v. C.U.P.E., Local 79), distd Other cases referred to Brampton Hydro Electric Commission v. National Automobile Aerospace and Agricultural Implement Workers Union, CAW Local 1285 (1993), 1993 8488 (ON SC), 15 O.R. (3d) 773, 108 D.L.R. (4th) 168 (Div. Ct.); Canadian Broadcasting Corp. v. Canada (Labour Relations Board), 1995 148 (SCC), [1995] 1 S.C.R. 157, 121 D.L.R. (4th) 385, 177 N.R. 1, 95 C.L.L.C. 210-009; Canadian Broadcasting Corp. v. Canadian Union of Public Employees, [1995] C.L.A.D. No. 57; Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corporation, 1979 23 (SCC), [1979] 2 S.C.R. 227, 25 N.B.R. (2d) 237, 97 D.L.R. (3d) 417, 26 N.R. 341, 51 A.P.R. 237; Metropolitan Toronto (Municipality) v. Canadian Union of Public Employees, Local 43, unreported, July 3, 1981 (Div. Ct.); Nordair Inc. v. International Association of Machinists and Aerospace Workers Local 2309 (1985), 1985 5463 (CA LA), 22 L.A.C. (3d) 177 (Can.); Ontario Hydro v. Ontario Hydro Employees' Union, Local 1000 (1983), 1983 1868 (ON CA), 41 O.R. (2d) 669, 147 D.L.R. (3d) 210 (C.A.); Pasiechnyk v. Procrane Inc., 1997 316 (SCC), [1997] 2 S.C.R. 890, 158 Sask. R. 81, 149 D.L.R. (4th) 577, 216 N.R. 1, 153 W.A.C. 81, [1997] 8 W.W.R. 517, 30 C.C.E.L. (2d) 149, 37 C.C.L.T. (2d) 1 (sub nom. Pasiechnyk v. Saskatchewan (Workers' Compensation Board)); [page644] Pushpanathan v. Canada (Minister of Citizenship and Immigration), 1998 778 (SCC), [1998] 1 S.C.R. 1222, [1998] 1 S.C.R. 982, 160 D.L.R. (4th) 193, 226 N.R. 201; United Brotherhood of Carpenters & Joiners, Local 579 v. Bradco Construction Ltd., 1993 88 (SCC), [1993] 2 S.C.R. 316, 106 Nfld. & P.E.I.R. 140, 102 D.L.R. (4th) 402, 153 N.R. 81, 334 A.P.R. 140, 93 C.L.L.C. 14,033 Statutes referred to Colleges Collective Bargaining Act, R.S.O. 1990, c. C.15, ss. 46(1), 52, 84(1) Human Rights Code, R.S.O. 1990, c. H.19 Labour Relations Act, R.S.O. 1990, c. L.2, s. 45(1) Authorities referred to Brown, D.J.M., and D.M. Beatty, Canadian Labour Arbitration, 3rd ed. (Toronto: Canada Law Book, 2002)

Christopher G. Riggs, for appellant. Timothy G.M. Hadwen, for respondent.

The judgment of the court was delivered by

LASKIN J.A.: --

A. Introduction

[1] This appeal raises the general question whether a collective bargaining regime precludes individual bargaining of the terms or conditions of employment.

[2] The appellant, Loyalist College, and the respondent, OPSEU, are parties to a collective agreement covering academic employees of the College, including teachers. Ms. Sherri Bergman applied for a job as a full-time teacher in the College's Early Childhood Education program. The College offered her the job on the condition that she pursue a graduate program in her field of study. She agreed to the condition and was given the job. However, ten months into her one-year probationary period Ms. Bergman had still not enrolled in a graduate program. The College then fired her.

[3] She grieved her firing. The majority of the Arbitration Board upheld her grievance and ordered that she be reinstated. [See Note 1 at end of document] [page645] The majority concluded that the condition of Ms. Bergman's hiring was invalid because the law prohibited a unionized employer and an employee from negotiating a condition of employment. Alternatively, the majority concluded that the condition was invalid because it conflicted with the collective agreement.

[4] In a brief endorsement, the Divisional Court dismissed the College's application for judicial review. The College now appeals, with leave, to this court. Its appeal raises these four issues:

1. Is the appropriate standard of review of the Board's decision correctness or patent unreasonableness?

2. Did the Board commit a reviewable error in concluding that the condition of Ms. Bergman's employment was invalid because the law prohibits a unionized employer from bargaining conditions of employment with an individual employee?

3. Alternatively, did the Board commit a reviewable error in concluding that the condition was invalid because it conflicted with the collective agreement?

4. Did the Board have jurisdiction to entertain the grievance of a probationary employee?

[5] For the reasons that follow I would dismiss the appeal.

B. Background Facts

[6] For eight years Sherri Bergman had been a sessional and part-time teacher in the College's Early Childhood Education program. Her qualifications included a Bachelor of Arts degree, majoring in psychology, from York University, and a Bachelor of Education and a diploma in Child Studies from the Institute of Child Study in Toronto.

[7] In the spring of 1999, Ms. Bergman applied for a full-time teaching position. The College's selection committee interviewed six applicants. The committee selected Ms. Bergman on the condition that after she was hired she would do graduate work (a Master's Degree) in her field of study.

[8] The president of the College formally offered Ms. Bergman the job in a letter dated July 14, 1999, which read in part:

I am writing to confirm, subject to a recent satisfactory medical report, our offer of employment as a Professor at Loyalist College commencing August 23, 1999.

. . . . . [page646]

The general terms of employment will be as outlined in the Collective Agreement and your annual salary at Step 14 will be $59,228.00. Please be aware that your probationary period will be one (1) year.

Your appointment is also based on the expectation that you will continue to pursue professional development in the ECE field or education through the Institute of Child Study or similar professional organization or graduate school. This will be further discussed with you by Dean K. Smith when you establish your annual objective.

Ms. Bergman signed the letter, thus agreeing to its terms. OPSEU was not consulted.

[9] The president's letter speaks of an "expectation", not a "condition", that Ms. Bergman pursue professional development. In this court, both sides raised the question whether the two words carried different legal consequences. I attach no significance to the use of the word "expectation" for two reasons. First, as I will discuss, in his termination letter the president used the word "condition"; and second, the Board found that the College had imposed a condition on Ms. Bergman's hiring, a finding I accept. I therefore approach this appeal on the footing that, as a condition of her employment, Ms. Bergman was required to enrol in a graduate program in Early Childhood Education or in a related field.

[10] She did not, however, immediately do so. Her appointment was effective August 23, 1999. She was assigned and taught a full course load, and the College evaluated her teaching in "very favourable" terms. But several times over the year the College reminded Ms. Bergman that she had yet to fulfil a condition of her employment. In April 2000, she told the College that she was then "in the process of applying to take a Master's Degree". By mid-May she still had not done so, prompting the College on May 18, 2000, to advise her in writing that she had until the end of May to show that she had complied. She did not do so.

[11] On June 20, 2000, the president wrote Ms. Bergman telling her the College would not be appointing her to a full-time faculty position. Instead she was told that her employment would terminate at the end of the month. The president gave a single reason for her dismissal: her failure to satisfy the condition of her employment.

Dear Sherri:

This letter is to advise you that, unfortunately the College will not be appointing you to a full-time faculty position. You will remain on staff until the end of June 2000 and then you will receive 90 days pay in lieu of notice plus your earned vacation.

This decision, made during your probationary period, was not reached lightly, and it is based on the fact that you have not fulfilled the conditions outlined in your letter of appointment concerning pursuing professional [page647] development in Adult Education or Early Childhood Education at the Master's level.

[12] Ms. Bergman was accepted into a graduate program on July 28, 2000, nearly a month before her probationary period would have ended. Her grievance, which she signed on June 28, 2000, went before the Board of Arbitration in November 2000.

[13] I turn to the issues on the appeal.

C. Discussion

First Issue: Is the appropriate standard of review of the Board's decision correctness or patent unreasonableness?

[14] As on most appeals of judicial review applications, a threshold question on this appeal is the appropriate standard for reviewing the decision of the Board of Arbitration. The College says the appropriate standard is correctness, or perhaps reasonableness; OPSEU says patent unreasonableness.

[15] The Board rested its decision to allow the grievance and reinstate Ms. Bergman on either of two findings: first, the condition of her hiring was invalid in law, regardless of whether it contradicted the collective agreement; or second, the condition was invalid because it contradicted the collective agreement. I therefore consider it appropriate in this case to consider the standard of review separately for each finding. See Canadian Broadcasting Corp. v. Canada (Labour Relations Board), 1995 148 (SCC), [1995] 1 S.C.R. 157, 121 D.L.R. (4th) 385.

[16] I begin with the second finding. For that finding the standard of review must certainly be patent unreasonableness.

[17] Under s. 84(1) of the Colleges Collective Bargaining Act, R.S.O. 1990, c. C.15 (the "Act"), the decision of the Arbitration Board is protected by a full privative clause, a clause that on its face precludes an appeal and any form of judicial review. See Pasiechnyk v. Saskatchewan (Workers' Compensation Board), 1997 316 (SCC), [1997] 2 S.C.R. 890, 149 D.L.R. (4th) 577. Section 84(1) provides:

84(1) No decision, order, determination, direction, declaration or ruling of the Commission, a fact finder, an arbitrator or board of arbitration, a selector or the Ontario Labour Relations Board shall be questioned or reviewed in any court, and no order shall be made or process entered, or proceedings taken in any court, whether by way of injunction, declaratory judgment, certiorari, mandamus, prohibition, quo warranto, application for judicial review or otherwise, to question, review, prohibit or restrain the Commission, fact finder, arbitrator or board of arbitration, selector or the Ontario Labour Relations Board or the proceedings of any of them.

[18] Since its decision in Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corp., 1979 23 (SCC), [1979] 2 S.C.R. 227, 97 D.L.R. (3d) 417, [page648] the Supreme Court has consistently held that for matters within a tribunal's jurisdiction, a full privative clause reflects the legislature's intent to limit review to patently unreasonable errors, unless other factors strongly point to a less deferential standard. See United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., 1993 88 (SCC), [1993] 2 S.C.R. 316, 102 D.L.R. (4th) 402, CBC v. Canada, supra, and Pushpanathan v. Canada (Minister of Citizenship and Immigration), 1998 778 (SCC), [1998] 1 S.C.R. 982, 160 D.L.R. (4th) 193.

[19] The most important of these other factors is, of course, the relative expertise of the Board on the issue before it. And in the present case this factor, too, supports a highly deferential standard. Whether the condition of Ms. Bergman's hiring contradicted the collective agreement is the kind of issue labour arbitrators often have to decide and on which they have a great deal of expertise.

[20] That brings me to the appropriate standard of review on the first and main finding of the Board, that the condition was invalid because the College could not legally bargain this condition with an individual employee. Despite the existence of the privative clause in s. 84(1) of the Act, the College argues for a standard of correctness for review of this finding. It relies on the well-reasoned judgment of my colleague Doherty J.A. in Toronto (City) v. Canadian Union of Public Employees, Local 79 (2001), 2001 24114 (ON CA), 55 O.R. (3d) 541, 205 D.L.R. (4th) 280 (C.A.). In that case an employee grieved his dismissal by the City after he had been convicted of sexual assault. One of the questions this court had to decide was the standard of review of the arbitrator's decision that the union could relitigate the employee's culpability. Doherty J.A. concluded that the appropriate standard was correctness. The arbitrator's decision turned on his understanding of the common law rules and principles governing the relitigation of issues decided in previous judicial proceedings. Neither the statute nor the collective agreement suggested that either the legislature or the parties intended the court to defer to the arbitrator's view of the common law.

[21] In the case before us the College similarly submits that in holding the condition of Ms. Bergman's hiring was invalid, the Arbitration Board had to interpret four Supreme Court of Canada cases -- a task for which it had no greater expertise than a court. It seems to me, however, that this case and the Toronto (City) case differ on three relevant points. These differences justify applying the patently unreasonable standard of review to the Board's conclusion that the condition was invalid and could not be individually bargained. [page649]

[22] First, in Toronto (City) the arbitrator was protected by a limited privative clause. In this case the Board is protected by a full privative clause. Second, in Toronto (City) the arbitrator had to interpret the common law. In this case, although the Board had to consider the Supreme Court of Canada's jurisprudence on pre-employment conditions, it also had to consider the Act and the recognition clause in the collective agreement, both matters on which its expertise was engaged. Third, in Toronto (City), as Doherty J.A. pointed out, not only was the question at issue one of law alone, it was also one of general significance that reached into many areas of the law. In this case the question at issue may be one of law alone, but it has no significance outside the labour relations context.

[23] In sum, the Board's decision is protected by a full privative clause; the Board had to decide a narrow question of law limited to the field of labour relations; and the question engaged the Board's expertise. All of these considerations point to the patently unreasonable standard of review of the Board's decision on the invalidity of the condition. But as I will discuss, I would not interfere with the Board's decision on this issue even if the appropriate standard were correctness.

Second Issue: Did the Board commit a reviewable error in concluding that the condition of Ms. Bergman's employment was invalid because the law prohibits a unionized employer from bargaining conditions of employment with an individual employee?

[24] The main issue on this appeal concerns the validity of the condition that Ms. Bergman enrol in a graduate program during her probationary year. On the record before us, Ms. Bergman complied with the condition because she registered in a Master's program nearly a month before what would have been the end of her probationary period. By then, however, she had already been dismissed.

[25] The Board did not need to deal with the effect of Ms. Bergman's registration because it concluded that the condition was invalid in law. Central to the Board's conclusion were s. 52 of the Act and Article 1.01 of the collective agreement, both of which explicitly provide that OPSEU is "the exclusive bargaining agent" for all employees covered by the collective agreement. In the Board's opinion, because of s. 52 of the Act and Article 1.01 of the agreement, "[t]he union alone, to the exclusion of the individual employee, has the legal authority to negotiate terms and conditions of employment on behalf of everyone in the bargaining unit." [page650]

[26] The Board interpreted the four Supreme Court of Canada cases that consider this issue to stand for the proposition that only the act of hiring -- "the employer's bare offer of the job and the employee's acceptance of the offer" -- could be individually negotiated. Even accepting that the condition of Ms. Bergman's hiring was not included in the collective agreement, the Board still held that it was invalid. In the Board's words, "[b]ecause the individual employee does not have the authority to negotiate terms and conditions of employment, the product of the attempt is invalid, even on matters the union and the employer omitted from the collective agreement."

[27] The College contends that the Board erred in concluding that the condition was invalid. It submits that it is entitled to negotiate directly with individual employees those pre-employment conditions not covered by the collective agreement. The College makes three arguments in support of its submission. First, the College argues that the Board misinterpreted the Supreme Court of Canada's jurisprudence on the scope for individual bargaining of conditions of employment. Second, it argues that the employer's management rights -- enshrined in Article 6.01 of the collective agreement -- entitled it to impose this condition on Ms. Bergman's hiring. Indeed, the College says it treated Ms. Bergman fairly by raising the question of graduate work before she was hired instead of afterwards. Third, the College argues that this court's decision in Johnston v. Dresser Industries Canada Ltd. (1990), 1990 6808 (ON CA), 75 O.R. (2d) 609, 28 C.C.E.L. 221 (C.A.) supports the validity of this pre-employment condition. I will address each of these arguments.

[28] The College argues that the Supreme Court's case law does not foreclose the possibility of individual bargaining of terms and conditions of employment. The four relevant Supreme Court of Canada decisions are: Syndicat catholique des employées de magasins v. Paquet Ltée, 1959 51 (SCC), [1959] S.C.R. 206, 18 D.L.R. (2d) 346; R. v. Canadian Pacific Railway, 1962 11 (SCC), [1962] S.C.R. 609, 34 D.L.R. (2d) 654; McGavin Toastmaster Ltd. v. Ainscough (1975), 1975 9 (SCC), [1976] 1 S.C.R. 718, 54 D.L.R. (3d) 1; and Canadian Assoc. of Industrial, Mechanical and Allied Workers, Local 14 v. Paccar of Canada Ltd., 1989 49 (SCC), [1989] 2 S.C.R. 983, 62 D.L.R. (4th) 437.

[29] The foundation case is Paquet, in which the court concluded that a collective agreement could provide for the compulsory deduction of union dues from the wages of all employees, even without their consent. Judson J. wrote that compulsory deduction was a condition of employment and, once agreed to by the employer and the union, became just as "regulatory of the employer/employee relationship as any other clause in the agreement". Judson J. [page651] continued at pp. 212-13 S.C.R., pp. 353-54 D.L.R. in a passage relied on by the Board and by both parties to this appeal.

The union is . . . the representative of all the employees in the unit for the purpose of negotiating the labour agreement. There is no room left for private negotiations between employer and employee. Certainly to the extent of the matters covered by the collective agreement, freedom of contract between master and individual servant is abrogated. The collective agreement tells the employer on what terms he must in the future conduct his master and servant relations. When this collective agreement was made, it then became the duty of the employer to modify his contracts of employment in accordance with its terms so far as the inclusion of those terms is authorized by the governing statutes. The terms of employment are defined for all employees, and whether or not they are members of the union, they are identical for all.

[30] The words of Judson J. are significant for this appeal in at least two ways. As he points out, all similarly situated employees in a bargaining unit are governed by identical terms of employment. Here, we have no evidence that the College required all those in Ms. Bergman's position to pursue graduate work. Subjecting her to a different condition of employment is antithetical to the notion of collective bargaining. Indeed, employers are ordinarily prohibited from bargaining directly with employees because permitting employers to do so would allow them to "divide and conquer", to play one employee off against another and, thus, defeat union solidarity.

[31] The passage from Paquet also confirms that a condition determining whether an employee retains his or her job is a condition of employment. And conditions of employment that govern job retention must be in the collective agreement. The condition of Ms. Bergman's hiring, which the College relied on to dismiss her, was not in this collective agreement.

[32] Nonetheless, the College draws support for its position from this sentence in the passage from Paquet: "Certainly to the extent of the matters covered by the collective agreement, freedom of contract between master and individual servant is abrogated." The College submits that precisely because the requirement for doing graduate work was not in the collective agreement it could legally negotiate this condition directly with Ms. Bergman. In the context of the entire passage, I do not think this one sentence can be taken to sanction individual bargaining of a condition, which, if breached, could result in the loss of a job.

[33] Moreover, whatever small scope for individual bargaining Judson J. left open in Paquet he seems to have narrowed in Canadian Pacific Railway, in which the Supreme Court held that striking employees are still protected by the collective agreement. Judson J. wrote at p. 624 S.C.R., p. 666 D.L.R.: [page652]

When a collective agreement had expired, it is difficult to see how there can be anything left to govern the employer-employee relationship. Conversely, when there is a collective agreement in effect, it is difficult to see how there can be anything left outside, except possibly the act of hiring.

(Emphasis added)

[34] The Board reasonably relied on this last sentence to hold that individual bargaining of anything more than the bare offer and acceptance of a job would be invalid.

[35] Judson J.'s reasoning in Paquet and Canadian Pacific Railway was affirmed by the Supreme Court in McGavin Toastmaster, another case dealing with the rights of striking employees. After referring to Paquet, Laskin C.J.C. wrote at p. 725 S.C.R., p. 6 D.L.R.:

The reality is, and has been for many years now throughout Canada, that individual relationships as between employer and employee have meaning only at the hiring stage and even then there are qualifications which arise by reason of union security clauses in collective agreements. The common law as it applies to individual employment contracts is no longer relevant to employer-employee relations governed by a collective agreement which, as the one involved here, deals with discharge, termination of employment, severance pay and a host of other matters that have been negotiated between union and the company as the principal parties thereto.

[36] Finally, in Paccar [at para. 10], La Forest J., writing for two of the four-member majority of the court, found reasonable an arbitration board's conclusion that under a collective bargaining regime, individual employees have no authority to negotiate on their own behalf; only the union can negotiate and, "[i]n these circumstances, it does not make sense to speak of individual contracts of employment at any time."

[37] What then does one take from these four cases? Admittedly, as the College argued, in none of them does the Supreme Court expressly prohibit individual bargaining of a condition of employment not covered by the collective agreement. In these cases, however, the court emphasized the sanctity of the collective bargaining regime and the role of the union as the representative of all employees in the bargaining unit. The court thus affirmed the principle that the collective agreement, not individual negotiation, should govern the employment relationship in a unionized workplace. Permitting an employer to negotiate directly with an employee a term or condition of continued employment conflicts with this principle. Therefore, it seems to me that the reasoning in the four Supreme Court of Canada cases precludes individual bargaining of a condition whose non-fulfilment could lead to dismissal.

[38] I think the jurisprudence on this question is fairly summarized by Brown and Beatty's Canadian Labour Arbitration, 3rd ed. (Toronto: Canada Law Book, 2002) at para. 2:1210. [page653]

It has long been established that individual employment relationships have meaning only at the hiring stage and that the individual employee's bargaining rights over terms and conditions of employment are pre-empted by a collective bargaining relationship . . . The only scope for individual bargaining with regard to terms and conditions of employment would appear to be where it is sanctioned by the collective agreement, by the collective bargaining agent, where it is ancillary to routine administration of the collective agreement, where the terms fall outside the scope of the agreement, such as an agreement concerning an early retirement arrangement or reimbursement for relocation expenses, or in some cases where there is a voluntary waiver of a collective agreement benefit that does not undermine the collective agreement.

(Footnotes omitted; emphasis added)

[39] In the case before us, the condition of Ms. Bergman's hiring was not sanctioned by the collective agreement and was not ancillary to the routine administration of the agreement. Nor, in my view, was it a term outside the scope of the agreement that might be individually bargained. Instead, it was a term that went to the core of Ms. Bergman's continued employment. Based on the Supreme Court of Canada's case law, the Board correctly held that the condition of Ms. Bergman's employment was invalid.

[40] The College also relies on its exclusive right to manage the institution provided for in Article 6.01 of the collective agreement. The College points out that many incidents of the employment relationship -- for example, teaching schedules and subjects taught -- are not, nor realistically could be, set down in the collective agreement. The College, as employer, has the right to make decisions in these areas.

[41] I accept that the College's right to manage gives it authority to impose its will on a myriad of matters not expressly dealt with in the collective agreement. But on a matter as important as a condition of employment, the breach of which can result in dismissal, the College cannot rely on its management rights. In Ms. Bergman's case, it either had to negotiate the condition of her hiring with the union or, as the Board pointed out, to require graduate study as a qualification for being hired in the first place.

[42] The College contends that in making graduate study a condition of her hiring it was being fair to Ms. Bergman, fairer than, for example, hiring her and then insisting that she do a Master's degree if she wished to become a full-time professor. This contention, however, is two-edged. The seeming fairness of apprising Ms. Bergman at the outset of the need to do graduate work evaporated because the College held her failure to comply against her even though it evaluated her teaching abilities favourably. Also, sanctioning the validity of a condition as important as that of Ms. Bergman's hiring risks opening a Pandora's box of side deals between employers and employees that could undermine the collective bargaining regime. [page654]

[43] Still, the College maintains that this court's decision in Dresser supports the validity of the condition of Ms. Bergman's hiring. To me, however, Dresser is an entirely different case. In Dresser, the employer induced six employees to leave secure jobs in England by promising them at least two years' employment in Canada. However, Dresser's business took a downturn, and before the two years were up, it laid off the six employees under the seniority provisions of the collective agreement. On these compelling facts, the trial judge found that these six employees had entered into pre-employment contracts, which were enforceable in the courts despite the existence of the collective agreement. As the employer had breached the contracts, the employees were entitled to damages. This court upheld the trial judge's decision.

[44] The College submits that just as this court upheld the validity of the pre-employment contracts in Dresser, so too should it uphold the validity of the hiring condition in this case. I consider that Dresser and this case differ in two material ways. First, in Dresser, this court upheld the finding of a separate, stand-alone pre-employment contract, outside the scope of the collective agreement. In this case the condition of Ms. Bergman's hiring did not amount to a separate pre-employment contract outside the agreement, but instead, as I have said earlier, was a condition of her continued employment under the agreement. Second, in Dresser, the employees, who were not parties to the collective agreement, sought to enforce their contractual rights in the court. In this case the party seeking to rely on the condition, the College, was a party to the collective agreement, and was subject to its terms, not in a court, but before a board of arbitration. Dresser does not assist the College.

[45] In my opinion, the Board did not commit a reviewable error in concluding that the condition of Ms. Bergman's employment was invalid because the law prohibits a unionized employer from bargaining conditions with an individual employee. The Board's conclusion was not patently unreasonable. Indeed, in my view the Board's conclusion was correct. On either standard of review, I see no basis to interfere.

Third Issue: Did the Board commit a reviewable error in concluding that the condition of Ms. Bergman's employment was invalid because it conflicted with the collective agreement?

[46] Although the Board concluded that the condition of Ms. Bergman's hiring was invalid in law, the Board also considered whether the condition was invalid because it conflicted with the agreement. And the Board concluded that the condition of Ms. [page655] Bergman's employment -- that she pursue graduate work in her field of study -- did conflict.

[47] The College submits that the Board committed a reviewable error in finding a conflict between the hiring condition and Article 27.02C. The College argues that the requirement to do graduate work was not covered by the collective agreement. Matters not expressly included in a collective agreement cannot contradict it and, therefore, can be negotiated directly with individual employees. The College contends that it did not act unfairly or in bad faith in telling Ms. Bergman that she could teach at the College as long as she had a graduate degree and that she should enrol in a graduate program during her probationary year.

[48] The College's submission is premised on the principle that a unionized employer and an employee can negotiate conditions of continued employment that are not expressly included in a collective agreement. I have already rejected this principle. Nonetheless, even accepting the principle, the Board's conclusion that the condition contradicted the collective agreement was reasonable.

[49] The Board examined "the language and scheme" of Article 27.02C of the collective agreement, which was the provision dealing with probationary employees. Article 27.02C provided:

27.02C During the probationary period an employee will be informed in writing of the employee's progress at intervals of four months continuous employment or four months of accumulated non-continuous employment and a copy given to the employee. Also, it is understood that an employee may be released during the first five months of continuous or non-continuous accumulated employment following the commencement date of the employee's employment upon at least 30 calendar days' written notice and during the remainder of the employee's probationary period upon at lease [sic] 90 calendar days' written notice. If requested by the employee, the reason for such release will be given in writing.

[50] In the Board's opinion, this provision was "designed to allow the teacher to attempt any desirable improvement as the probationary period goes on. If the academic administrators are dissatisfied with the 'progress', the College may release the teacher upon written notice of stated length." The condition of Ms. Bergman's hiring, in the Board's view, contradicted the scheme and purpose of Article 27.02C because it added a ground for her release not found in the collective agreement: "no matter how well Bergman did the job as teacher and performed generally as a member of the program and of the faculty the condition allows the College to release her if she had not at least enrolled in ECE graduate study by August 23, 2000." [page656]

[51] The Board's finding of a conflict between the condition and the collective agreement makes good sense. The Board viewed Article 27.02C in the light of labour arbitrators' understanding of the traditional purpose of a probationary period: to assess the employee's on-the-job performance. Under clause 27.02C a probationary employee received progress reports at four-month intervals, which were intended to allow the employee to redress any shortcomings in his or her job performance. That, in substance, was the deal made by the College and OPSEU. Although not expressly contradicting Article 27.02C, the hiring condition implicitly conflicted with it and with its purposes. This condition added to and, thus, undermined the deal made between the College and OPSEU.

[52] The standard of review of the Board's conclusion on this issue is patent unreasonableness. I have found that the Board's conclusion is reasonable. It is therefore not patently unreasonable. Accordingly, I would not give effect to the College's submission on this issue.

Fourth Issue: Did the Board have jurisdiction to entertain Ms. Bergman's grievance?

[53] The Act contains a provision -- s. 46(1) -- which, like s. 45(1) of the Labour Relations Act, R.S.O. 1990, c. L.2, requires that every collective agreement provide for the arbitration of all differences between the parties, including whether a matter is arbitrable. Section 46(1) states:

46(1) Every agreement shall provide for the final and binding settlement by arbitration of all differences between an employer and the employee organization arising from the interpretation, application, administration or alleged contravention of the agreement including any question as to whether a matter is arbitrable.

Articles 32.03 and 32.04 of the collective agreement between the College and OPSEU provided for arbitration in the terms required by the Act, if a difference between the parties had not been satisfactorily resolved by the prescribed grievance procedures.

[54] However, Article 32.06 of the collective agreement on its face precluded a probationary employee from grieving his or her dismissal.

32.06 It being understood that the dismissal of an employee during the probationary period shall not be the subject of a grievance, an employee who has completed the probationary period may lodge a grievance in the manner set out in 32.07 and 32.08.

[55] In the light of this provision, the College submits that the Board of Arbitration should not have entertained Ms. Bergman's [page657] grievance. I do not accept this submission. In my view, the Board had jurisdiction to deal with the grievance.

[56] Admittedly, the Board did not expressly address its jurisdiction over Ms. Bergman's grievance, perhaps because -- as the Divisional Court noted -- "the arbitration proceeded on the basis that the Board would address the issue of the 'condition' of employment." But the Board, nonetheless, implicitly assumed jurisdiction and it was correct to do so.

[57] The question of the Board's jurisdiction to hear the grievance brings into play two competing principles. The first principle is that, generally, arbitrators cannot review the merits of an employer's decision to dismiss a probationary employee. The second principle, a qualification on the first, is that arbitrators may be entitled to review an employer's decision to dismiss a probationary employee if the decision is made in bad faith or is based on a illegal or invalid consideration. Both principles are reflected in this collective agreement and the governing statute, the Colleges Collective Bargaining Act. The application of the second principle clothed the Board with jurisdiction to hear Ms. Bergman's grievance because her dismissal was based on an invalid consideration, namely, the condition of her continuing employment.

[58] Probationary employees are typically thought of as serving a period of apprenticeship. During this period employers expect wider latitude in their decisions to dismiss new employees judged not suitable for continued employment. Thus, ordinarily probationary employees cannot expect the protection of the just cause provision enjoyed by those employees who have completed their probationary period. See Nordair Inc. v. International Association of Machinists and Aerospace Workers Local 2309 (1985), 1985 5463 (CA LA), 22 L.A.C. (3d) 177 (Can.); Canadian Broadcasting Corp. v. Canadian Union of Public Employees, [1995] C.L.A.D. No. 57.

[59] Ms. Bergman was in this position. The collective agreement between the College and OPSEU entitled the College to terminate Ms. Bergman's employment without cause. Article 27.02C, to which I have referred, provided that a probationary employee may be released during the first five months of employment on 30 days written notice and, during the remainder of the probationary period, on at least 90 days written notice. This notice requirement affirmed that the College could dismiss a probationary employee without cause. Taken together, Articles 27.02C and 32.06 precluded an arbitrator from entertaining a probationary employee's claim that he or she was dismissed without just cause. That claim could not become a "difference" arising from the application or contravention of the agreement and, therefore, it would not be arbitrable. [page658]

[60] Nonetheless, the College did not have an unfettered right to dismiss probationary employees. Although the collective agreement did not give probationary employees the right to just cause for dismissal, it did give them other limited rights. An alleged breach of any of these rights may give rise to a difference in the interpretation, application or administration of the collective agreement, and failing resolution, would then be arbitrable. See Ontario Hydro v. Ontario Hydro Employees' Union, Local 1000 (1983), 1983 1868 (ON CA), 41 O.R. (2d) 669, 147 D.L.R. (3d) 210 (C.A.).

[61] So, for example, one right of a probationary employee was the right not to be discriminated against on the various grounds prescribed in Article 4.01. [See Note 2 at end of document] Another right was the right not to be dismissed in bad faith. For many years arbitrators and courts have held that this right is an implied term of every collective agreement and extends to all employees, including probationary employees. See Brampton Hydro Electric Commission v. C.A.W., Local 1285 (1993), 1993 8488 (ON SC), 15 O.R. (3d) 773, 108 D.L.R. (4th) 168 (Div. Ct.) and Metropolitan Toronto (Municipality) v. Canadian Union of Public Employees, Local 43, unreported, July 3, 1981 (Div. Ct.).

[62] Here, however, the Board did not make a finding that the College discriminated against Ms. Bergman or acted in bad faith in dismissing her. Although OPSEU urged this court to make a finding of bad faith, I think it inappropriate to do so on appeal, at least on the record before us.

[63] However, just as the College could not dismiss a probationary employee in bad faith, neither could it dismiss a probationary employee by relying on a condition of employment that was illegal or conflicted with the collective agreement. Article 32.06 assumes that the College will act lawfully. The parties could not have intended otherwise. Moreover, this assumption underlying Article 32.06 was reinforced by Article 6.02, which provided that the College had a duty to exercise its management functions consistently with the terms of the collective agreement. Article 32.06 did not empower the College to do what it did to Ms. Bergman: ground her dismissal on the breach of a condition that was either unlawful or contradicted the collective agreement.

[64] The College could have properly dismissed Ms. Bergman for reasons related to her suitability for the job. [See Note 3 at end of document] What the College could not do was rely on its own prohibited conduct to dismiss her. [page659] The College's reliance on a condition that was either unlawful or in conflict with the collective agreement entitled Ms. Bergman to grieve her dismissal. Accordingly, the Board of Arbitration had jurisdiction to entertain the grievance under the arbitration provisions of the collective agreement and s. 46 of the Act. I would therefore not give effect to this ground of appeal.

D. Conclusion

[65] I would dismiss the appeal with costs in the amount agreed to by the parties, $8,000.

Appeal dismissed.

Notes

[See Note 1 at end of document] The majority decision was written by the Chairman, Stanley Schiff and the union's nominee Sherril Murray. The employer's, R.J. Gallivan, dissented. In these reasons I will refer to the majority decision as the decision of the Board.

[See Note 2 at end of document] The listed grounds are those set out in the Ontario Human Rights Code, R.S.O. 1990, c. H.19.

[See Note 3 at end of document] Under Article 27.02C, a probationary employee was entitled to the reason for his or her dismissal, in writing.